Belfast, shipbuilding, and the game of billiards that changed the world

It is almost universally known that Belfast played a pivotal role in the history of shipbuilding. However, amidst the mania for all things related to the most famous ship built in the city, it can often be overlooked that Belfast produced ships that didn’t sink, too. It may not have the fame of RMS Titanic, but the development and launch of RMS Oceanic and her sister ships in 1870 may have been one of the most pivotal developments in world history.

This fascinating article from the Washington Centre for Equitable Growth argues that 1870 was an inflection point for world trade. Virtually overnight, the time and expense of shipping goods and people by sea collapsed. The Oceanic made the journey from Liverpool to New York in nine days; in 1800 the equivalent journey took over a month. Previously, agricultural products more or less had to be consumed within a short distance of where they were harvested. Now, food could be shipped around the world. It was the dawn of the first age of globalization, when the economies of the world started to become intertwined with each other as never before.

The genesis of the Oceanic Steam Navigation Company, better known as the White Star Line, the company that produced the Oceanic and would go on to build the Titanic, was a game of billiards. Gustav Schwabe, longstanding business associate of Edward Harland and the uncle of Gustav Wolff, invited Thomas Ismay to his home in West Derby, Liverpool. Ismay had recently purchased the flag and goodwill of the bankrupt White Star Line in 1868, and was determined to build a business plying iron ships on the north Atlantic route.

Schwabe was a wealthy shareholder in John Bibby & Sons, a shipping company who had purchased a large number of ships from the recently formed Harland & Wolff partnership. Unable to increase his stake in that company, he made an offer to Thomas Ismay. Over a game of billiards, he offered to finance Ismay’s ambitions, but with one precondition; that the ships be built by his nephew’s company in Belfast. Eager to see his dreams of building a shipbuilding empire become reality, he agreed. The Oceanic Steam Navigation Company was formed with capital of 400 shares of £1,000 each. Amongst the investors were Edward Harland and Gustaf Wolff. The outcome of this game of billiards was the dawn of Belfast as an industrial powerhouse, and an impact upon world trade which would eventually transform the world.

The partnership between Harland & Wolff and the White Star Line would prove to be an astonishingly successful one. Edwin Harland designed the ships, but Thomas Ismay suggested a number of design innovations that set the Oceanic apart from her peers, such as a wide saloon that allowed all passengers to dine together, larger cabins and larger portholes to give passengers a better view. Transatlantic travel turned from a slow, uncomfortable affair into one which was both swift and comfortable.

Another key person in the transformation of shipping that the Oceanic would herald was the Scottish engineer and shipbuilder John Elder, although he had no direct involvement with neither Harland & Wolff nor the White Star Line. John Elder made a revolutionary series of improvements in the efficiency of steam engines which were secured through a number of patents in the 1850s, and it was with the expiry of these patents in 1870 that Harland & Wolff were able to incorporate these revolutionary engines in the Oceanic.

John Elder

John Elder

It is difficult to overstate the impact that Elder’s innovations would have on shipbuilding. Prior to the 1850s the most efficient steam engines consumed coal at a rate of 4½ lb of coal per indicated horse power per hour, but Elder’s innovations meant that his engines consumed only 2½ lb per indicated horse power per hour. This was an astonishing increase in efficiency; it was no exaggeration to say that this development meant it was possible for the first time in history to cross the Pacific under steam power alone. Elder’s innovations would be one of the most disruptive acts of “creative destruction” in history; he effectively ended the era of sailing ships and single-handedly brought about the age of steam.

The effects on the world economy would be dramatic. The graph below shows the volume of world trade from 1850 until the advent of World War I; having increased gradually from 1850 to 1870, trade exploded from this point onwards.

World Trade 1850-1913

This explosion in world trade had a major impact on people, not least because it reduced the price and the volatility of supply of essential foodstuffs. Prior to the 1870 the price of wheat, an essential staple, was both high and volatile. As there was no cost effective way of shipping the product long distances, crop failures could have a catastrophic effect, with the resultant spike in prices having the effect of food becoming unaffordable, leading to famine.

Wheat Prices 1850-1913

Now that wheat could be shipped cheaply from where it was produced to where it was needed, both prices and volatility fell. Note how prices in Chicago, close to the breadbasket Great Plains area of the United States were historically lower than prices in London and New York. In the age of steam, this wheat could now be shipped anywhere. Food was now cheaper across the world, freeing up surplus income for people to spend on other things other than meeting their basic needs. The era of globalization had begun, and world would be changed forever.

The shipbuilding flair of Harland & Wolff, the entrepreneurial drive of Thomas Ismay and Gustav Schwabe, and their ability to take advantage of John Elder’s revolutionary new engines, meant that the White Star Line and Harland & Wolff would combine to make a product that would change the course of history. As well as the transformative effect on world trade, the iron hulled steam liner would allow for cheap and fast movements of people across the world, including the movement of armies. The Oceanic marked the dawn of the modern era, and it was in the shipyards of Belfast that this new era was born.

1200px-William_Lionel_Wyllie_-_The_Oceanic

 

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  • Starviking

    Eyeballing the World Trade Volume Graph, 1861 seems to be where trade starts noticeably increasing. I wouldn’t term it explosive though, I’d reserve that for something exponential in form.

  • Brian O’Neill

    Good post. Once we were an industrial powerhouse that made things that were used all over the world. Now we use our time and energy to fight about flags and cakes…

  • Ben De Hellenbacque

    Vision, knowledge/understanding, ambition and global scope all successfully demonstrated in a rapidly changing world. Fast forward to 2015.

  • Mister_Joe

    Yes, Belfast was a major world city. Now, as the Orange Order leader says, there is a “festering sore” in North Belfast, one that he could cure overnight if his brethern accepted the law. But instead, he calls for other (legal) protests to be carried out elsewhere. So sorry Belfast, a city that I once loved to live and work in.

  • salmonofdata

    It was definitely exponential growth. Check out the 99%+ R squared. The combined effects of the World Wars and the Great Depression put an end to the exponential growth in trade, and it didn’t start again until the advent of the shipping container after World War II.

  • Starviking

    First, I was saying that about 1861. And there does not appear to be an exponential growth rate from 1861.

    I also wouldn’t term the whole graph exponential: it looks more like cubic growth.

  • Kevin Breslin

    Sad to think if the UK leaves the EU, the legacy of UK based and European based mass production and heavy engineering may fall there and elsewhere across Europe as it will no longer have any means to compete with USA, Canada, Russia, China, India, Australia and Japan and Europe begging for the crumbs from their table.

    Imagine the future where Ferrari is owned by Ford or Tata Motors.

    For want of a German nail and French plywood, or rather the highly specialized engineered components it may actually take one factory to make in one nation and another to put together in another.

    Still the bankers and financiers who’ve put their money into gold and Arab oil and possibly UKIP over insecurities about the Eurozone probably have a better understanding of how to make things rather than the manufacturers do. Needless to say the time the far European right goes from Powell-esque anti-Continentialism to Mosley-esque anti-Atlanteanism hasn’t arrived yet, but will come in time.

    Of course what do I know?

    Praxeology is a substitute for precision engineering and the Nation of Shopkeepers is holding its own against Amazon.

  • Kevin Breslin

    A power growth x^n can be written in terms of an exponential series (e.g. Fourier Transform) and vice versa (e.g. Taylor series).

  • Starviking

    You do seem to have a good mathmatical head on you Kevin. Mine is a bit aged.

    However,
    I was referring to exponential in the common sense, i.e. the sharp
    curve as it approaches the asymptote. I just can’t see the “explosive growth” that Salmon states is occurring from 1870. Looking at the graph I see an increase in growth rate from 1862 to 1871, a decrease in growth rate from 1871 to 1882, and various ups-and-downs from there.

    What do you think of the graph?

  • Old Mortality

    Great to see some serious mathematics on Slugger.